Employment contracts for most employees are not publicly available, leaving researchers to speculate about whether they contain postemployment restrictions on employee mobility, and if so, what those provisions look like. Using a large sample of publicly available CEO employment contracts, we are able to examine these noncompetition covenants, including postemployment covenants not to compete (“CNCs” or “noncompetes”), nonsolicitation agreements (“NSAs”), and nondisclosure agreements (“NDAs”). What we found confirms some long-held assumptions about restrictive covenants but also uncovers some surprises.

We begin by discussing why employers use restrictive covenants and examining how the courts have treated them. We then analyze an extensive sample of CEO employment contracts drawn from a large random sample of 500 S&P 1500 companies. We find that 80% of these employment contracts contain CNCs, often with a broad geographic scope, and that these generally last only one to two years. Similarly, we find that NSAs routinely appear in these contracts, barring solicitation of the firm’s employees and customers or clients. We demonstrate that NDAs are prevalent and prohibit the CEOs from disclosing unspecified “confidential information.” In addition, we note that there is a strong “California effect,” whereby firms from that state are less likely to put CNCs in employment contracts.

Our research also uncovers several previously undocumented trends. First, increasingly more and more restrictive covenants are appearing over time, and they are appearing with increasingly expansive enforcement rights for the firm.. Second, there is clear path dependence for these clauses, with a prior CNC being a strong predictor of CNC use in future employment contracts. Third, long-term contracts are more likely to have CNC clauses than short-term contracts, probably because firms have more confidence in making investments in CEOs that are committed to staying for longer periods. We argue that this shows that for some firms the risk of harm from a departing executive may simply be more acute than for other firms.

AUTHORS

Norman D. Bishara
Associate Professor of Business Law and Business Ethics, Stephen M. Ross School of Business, University of Michigan.

Kenneth J. Martin
Regents Professor of Finance, College of Business, New Mexico State University.

Randall S. Thomas
John Beasley II Professor of Law and Business, Vanderbilt Law School, Professor of Management, Owen School of Business, Vanderbilt University.

The conventional wisdom is that state courts need not follow lower federal court precedent when interpreting federal law. Upon closer inspection, however, the question of how state courts should treat lower federal court precedent is not so clear. Although most state courts now take the conventional approach, a few contend that they are obligated to follow the lower federal courts, and two federal courts of appeals have declared that their decisions are binding on state courts. The Constitution’s text and structure send mixed messages about the relationship between state and lower federal courts, and the Supreme Court has never squarely addressed the matter. Remarkably, this significant question about the interplay between the state and federal judicial systems lingers unresolved more than two-hundred years after the Constitution’s ratification.

This Article uses this question to explore the relationship between state and lower federal courts. As a constitutional matter, it can be argued that state courts were intended to play a subordinate role to the lower federal courts when interpreting federal law, even if they are viewed as equals when it comes to finding facts and applying facts to law. Furthermore, Congress’s decision to create the lower federal courts, and then assign them broad federal question jurisdiction, arguably displaces state court authority to interpret federal law independently—particularly in an era in which the Supreme Court lacks the capacity to resolve many of the splits between the federal and state court systems. Finally, as a practical matter, allowing state courts to diverge from lower federal court precedent on matters of federal law can create disruptive intrastate conflicts that lead to forum shopping and can sometimes take years to resolve.

Although state courts are unlikely to reverse course and declare that they are bound by the decisions of the lower federal courts, both Congress and the Supreme Court arguably have the authority to require that they do so. The Article concludes by describing the source of these institutions’ authority over state courts, as well as the costs and benefits of requiring state courts to follow lower federal court precedent.

There is longstanding tension between originalism and judicial precedent. With its resolute focus on deciphering the enacted Constitution, the originalist methodology raises questions about whether judges can legitimately defer to their own pronouncements. Numerous scholars have responded by debating whether and when the Constitution’s original meaning should yield to contrary precedent.

This Article considers the role of judicial precedent not when it conflicts with the Constitution’s original meaning but rather when the consultation of text and historical evidence is insufficient to resolve a case. In those situations, deference to precedent can serve as a fallback rule of constitutional adjudication. The strengths and weaknesses of the originalist methodology take on a unique valence when a primary commitment to original meaning is coupled with a fallback rule of deference to precedent. Even when the Constitution’s original meaning leaves multiple options available, falling back on precedent can channel judicial discretion and contribute to a stable, impersonal framework of constitutional law.

AUTHOR

Associate Professor of Law, Notre Dame Law School.

]]>http://www.vanderbiltlawreview.org/2015/01/original-meaning-and-the-precedent-fallback/feed/0Statutory Interpretations and the Therapy of the Obvioushttp://www.vanderbiltlawreview.org/2015/01/statutory-interpretations-and-the-therapy-of-the-obvious/
http://www.vanderbiltlawreview.org/2015/01/statutory-interpretations-and-the-therapy-of-the-obvious/#commentsMon, 26 Jan 2015 20:34:00 +0000Kourtney Trainahttp://www.vanderbiltlawreview.org/?p=2282Statutory Interpretations and the Theory of the Obvious

AUTHOR

University Professor of Law and Political Science, Vanderbilt University Law School.

Professor of Law Emeritus and President Emeritus, University of Virginia; Former President and Professor of Law, University of Wisconsin System, Senior Fellow, Association of Governing Boards of Colleges and Universities.

Professor of Law and University Distinguished Professor, City University of New York (CUNY) School of Law. My thanks to the editors and staff of the Vanderbilt Law Review for their excellent work, to Kara Wallis, CUNY School of Law Class of 2015 for preliminary research, and to Sarah Valentine for support.

]]>http://www.vanderbiltlawreview.org/2015/01/public-interest-lawyering-judicial-politics-four-cases-worth-a-second-look-in-williams-yulee-v-the-florida-bar/feed/0Much Ado About Nothing: The Irrelevance of Williams-Yulee v. The Florida Bar on the Conduct of Judicial Electionshttp://www.vanderbiltlawreview.org/2015/01/much-ado-about-nothing-the-irrelevance-of-williams-yulee-v-the-florida-bar-on-the-conduct-of-judicial-elections/
http://www.vanderbiltlawreview.org/2015/01/much-ado-about-nothing-the-irrelevance-of-williams-yulee-v-the-florida-bar-on-the-conduct-of-judicial-elections/#commentsThu, 15 Jan 2015 01:41:21 +0000Kourtney Trainahttp://www.vanderbiltlawreview.org/?p=2248Much Ado About Nothing: The Irrelevance of Williams-Yulee v. The Florida Bar on the Conduct of Judicial Elections

David W. Earley was an attorney at the Brennan Center for Justice at N.Y.U. School of Law from 2010 to 2014. Matthew J. Menendez is Counsel at the Brennan Center. The authors would like to thank Lawrence Norden for his helpful comments during the drafting of this article. The Brennan Center submitted an amicus brief with the U.S. Supreme Court in Williams-Yulee v. The Florida Bar advocating that the Court uphold the personal solicitation prohibition as constitutional. Brief for Brennan Ctr. for Justice at N.Y.U. School of Law et al. as Amici Curiae Supporting Respondent-Appellee, Williams-Yulee v. The Florida Bar, 138 So.3d 379, cert. granted, 135 S. Ct. 44 (No. 13-1499) (December 24, 2014), available at http://www.brennancenter.org/sites/default/files/analysis/Brennan%20Center%20Williams-Yulee%20Amicus%20122414.pdf, archived at http://perma.cc/U3S7-USZQ.

Professor of Law, University of Kansas School of Law. Thanks to Nicole Smith, Mark Wilkins, and Abigail West for helpful research assistance.

]]>http://www.vanderbiltlawreview.org/2015/01/judicial-elections-judicial-impartiality-and-legitimate-judicial-lawmaking-williams-yulee-v-the-florida-bar/feed/0The Jekyll and Hyde of First Amendment Limits on the Regulation of Judicial Campaign Speechhttp://www.vanderbiltlawreview.org/2015/01/the-jekyll-and-hyde-of-first-amendment-limits-on-the-regulation-of-judicial-campaign-speech/
http://www.vanderbiltlawreview.org/2015/01/the-jekyll-and-hyde-of-first-amendment-limits-on-the-regulation-of-judicial-campaign-speech/#commentsThu, 15 Jan 2015 01:40:19 +0000Kourtney Trainahttp://www.vanderbiltlawreview.org/?p=2271The Jekyll and Hyde of First Amendment Limits on the Regulation of Judicial Campaign Speech

John F. Kimberling Professor of Law, Indiana University Maurer School of Law. I’d like to thank Jim Alfini, Dan Conkle, James Sample, and Margaret Tarkington for their thoughts and comments.

]]>http://www.vanderbiltlawreview.org/2015/01/the-jekyll-and-hyde-of-first-amendment-limits-on-the-regulation-of-judicial-campaign-speech/feed/0What Do Judges Do All Day? In Defense of Florida’s Flat Ban on the Personal Solicitation of Campaign Contributions From Attorneys by Candidates for Judicial Officehttp://www.vanderbiltlawreview.org/2015/01/what-do-judges-do-all-day-in-defense-of-floridas-flat-ban-on-the-personal-solicitation-of-campaign-contributions-from-attorneys-by-candidates-for-judicial-office/
http://www.vanderbiltlawreview.org/2015/01/what-do-judges-do-all-day-in-defense-of-floridas-flat-ban-on-the-personal-solicitation-of-campaign-contributions-from-attorneys-by-candidates-for-judicial-office/#commentsThu, 15 Jan 2015 01:40:02 +0000Kourtney Trainahttp://www.vanderbiltlawreview.org/?p=2272What Do Judges Do All Day? In Defense of Florida’s Flat Ban on Personal Solicitation of Campaign Contributions From Attorneys by Candidates for Judicial Office

Inez Milholland Professor of Civil Liberties, New York University School of Law. I make no pretense of scholarly neutrality in connection with this Essay. In my capacity as a former National Legal Director of the ACLU (I served on the ACLU legal staff for eleven years, as National Legal Director from 1981–85), I have joined other past leaders of the ACLU in filing a brief amici curiae in Williams-Yulee defending the constitutionality, if not the wisdom, of Florida’s ban. See Brief for Amici Curiae Submitted on Behalf of Respondent by Norman Dorsen et al., as Past Leaders of the American Civil Liberties Union, Williams-Yulee v. The Florida Bar, 138 So.3d 379 (No. 13-1499) (Dec. 24, 2014), 2014 WL 7477680.

]]>http://www.vanderbiltlawreview.org/2015/01/what-do-judges-do-all-day-in-defense-of-floridas-flat-ban-on-the-personal-solicitation-of-campaign-contributions-from-attorneys-by-candidates-for-judicial-office/feed/0Williams-Yulee v. The Florida Bar, the First Amendment, and the Continuing Campaign to Delegitimize Judicial Electionshttp://www.vanderbiltlawreview.org/2015/01/williams-yulee-v-the-florida-bar-the-first-amendment-and-the-continuing-campaign-to-delegitimize-judicial-elections/
http://www.vanderbiltlawreview.org/2015/01/williams-yulee-v-the-florida-bar-the-first-amendment-and-the-continuing-campaign-to-delegitimize-judicial-elections/#commentsThu, 15 Jan 2015 01:39:02 +0000Kourtney Trainahttp://www.vanderbiltlawreview.org/?p=2273Williams-Yulee v. The Florida Bar, the First Amendment, and the Continuing Campaign to Delegitimize Judicial Elections